rchandising business. The account balances for South Coast Boards Co. as of July 1, 201

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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South Coast Boards Co. is a merchandising business. The account balances for South

Coast Boards Co. as of July 1, 2010 (unless otherwise indicated), are as follows:


110
Cash
$ 63,600

112
Accounts Receivable
153,900

115
Merchandise Inventory
602,400

116
Prepaid Insurance
16,800

117
Store Supplies
11,400

123
Store Equipment
469,500

124
Accumulated Depreciation—Store Equipment
56,700

210
Accounts Payable
96,600

211
Salaries Payable

310
Rocky Hansen, Capital, August 1, 2009
555,300

311
Rocky Hansen, Drawing
135,000

312
Income Summary

410
Sales
3,221,100

411
Sales Returns and Allowances
92,700

412
Sales Discounts
59,400

510
Cost of Merchandise Sold
1,623,000

520
Sales Salaries Expense
334,800

521
Advertising Expense
81,000

522
Depreciation Expense

523
Store Supplies Expense

529
Miscellaneous Selling Expense
12,600

530
Office Salaries Expense
182,100

531
Rent Expense
83,700

532
Insurance Expense

539
Miscellaneous Administrative Expense
7,800


During July, the last month of the fiscal year, the following transactions were completed: July 1. Paid rent for July, $5,000.
3. Purchased merchandise on account from Belmont Co., terms 2/10, n/30, FOB shipping point,

$40,000.

4. Paid freight on purchase of July 3, $600.

6. Sold merchandise on account to Modesto Co., terms 2/10, n/30, FOB shipping point,

$25,000. The cost of the merchandise sold was $15,000.

7. Received $26,500 cash from Yuba Co. on account, no discount.

10. Sold merchandise for cash, $80,000. The cost of the merchandise sold was $50,000.

13. Paid for merchandise purchased on July 3, less discount.

14. Received merchandise returned on sale of July 6, $6,000. The cost of the merchandise returned was $4,500.
15. Paid advertising expense for last half of July, $7,500.

16. Received cash from sale of July 6, less return of July 14 and discount.

19. Purchased merchandise for cash, $36,000.

19. Paid $18,000 to Bakke Co. on account, no discount.

20. Sold merchandise on account to Reedley Co., terms 1/10, n/30, FOB shipping point, $40,000.

The cost of the merchandise sold was $25,000.

21. For the convenience of the customer, paid freight on sale of July 20, $1,100.

21. Received $17,600 cash from Owen Co. on account, no discount.

21. Purchased merchandise on account from Nye Co., terms 1/10, n/30, FOB destination, $20,000.

24. Returned $2,000 of damaged merchandise purchased on July 21, receiving credit from the seller.

26. Refunded cash on sales made for cash, $3,000. The cost of the merchandise returned was

$1,800.

28. Paid sales salaries of $22,800 and office salaries of $15,200.

29. Purchased store supplies for cash, $2,400.

30. Sold merchandise on account to Whitetail Co., terms 2/10, n/30, FOB shipping point,

$18,750. The cost of the merchandise sold was $11,250.

30. Received cash from sale of July 20, less discount, plus freight paid on July 21.

31. Paid for purchase of July 21, less return of July 24 and discount.

 

 

 

PLEASE 

 

A. Prepare an income statement, a statement of owner’s equity, and a balance sheet.

B. Prepare and post the closing entries. Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. Insert the new balance in the owner’s capital account.
C. Prepare a post-closing trial balance.

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